Sales, revenue, and memberships vary across the financial services industry. But every financial brand should be aware of the key metrics that indicate marketing success, member retention, and growth. Use the following eight metrics to evaluate your business strategies and gauge your opportunities for improvement.


1. Member Acquisition Cost

Definition: The total average cost spent to acquire a new member, including all spend for ads and other marketing tactics, salaries, and overhead. 

How to calculate it: First, determine what action makes someone a new member of your financial branch—opening a checking account, taking out a loan, etc. Then, take the total spend for acquiring new members (marketing spend (including ad spend), salaries (including commissions and bonuses), overhead, etc.) in a given time period and divide it by the number of new members acquired in that time.

Example: A financial brand spent $5,000 in ads and marketing programs in September. Add $10,000 for salaries and $2,500 for overhead, divide by the number of new members acquired in September, and your equation should look like this:

$17,500 / 10 = $1,750 per member

Why it matters: This metric will be closely tied with the next metric of member lifetime value. You may be willing to spend more to acquire members with a high lifetime value. The longer you can maintain your relationship with your members, the better. If acquisition costs are rising but new members are not, revisit your marketing tactics and see where to channel your efforts.

How you can improve it: There are many ways to revisit your spend on ads (lead sources, click-through rates, conversion rates, etc.). But a free Google listing may be what actually converts high-intent customers. “Near me” Google searches are increasing every year. Optimize your Google Business Profile listing by claiming your location, updating your business hours (especially relating to COVID), adding a textable line, and verifying your website from the Google Map Pack—all for free. 


2. Member Lifetime Value

Definition: The projected revenue that a member will generate during their lifetime or membership with your financial brand. 

How to calculate it: There are various formulas to consider, depending on the type of purchases or profits you’re considering as part of membership. You might start by segmenting the different transactions your members make throughout the journey, as well as calculating how long your current members have been with you. From there, you can consider the daily average for fees, interest rates, and other charges; the number of members; and average retention time for members. 

Add up your daily charges and divide it by the number of days in the time frame you choose. Next, take your average daily charge and divide it by the number of members contributing to the average. Then, multiply that number by your retention rate. A simple member lifetime value formula could look like this:

(365(a) x t) 

a = daily average charge per member 

t = average member lifespan

For an in-depth explanation and member lifetime value formulas, visit this infographic

Example: A bank may have 5,000 members, an average daily charge of $10,000, and an average member lifetime of 10 years. 

a = $10,000 / 5,000 = $2  

t =  10 years 

365($2) x 10 = $7,300 Member Lifetime Value

Why it matters: You want to keep members in for the long run by providing relevant services members use consistently, repeatedly, or down the road. Having an estimate of what you can expect from members will also help you budget how much you’re willing to spend in acquisition and retention efforts.

How you can improve it: Expand your offerings to current members. Make the process of opening additional accounts or utilizing more of your services convenient, personal, and mobile-friendly. Even if most of a member’s interactions with your financial brand are digital, assign employees and staff to periodically check in with members, make sure they’re pleased, and inform them of benefits they could be earning. 


3. Google Ratings

Definition: The quantity of reviews and the average star rating of your Google Business Profile listing. 

Example: In this example, the number of reviews is 19 and the average star rating is 4.0.

Why it matters: Potential members are choosing finserv brands based on Google research. And Google ranks your listing based on the frequency, quantity, and average star rating of your Google Business Profile reviews. 97% of consumers are reading online reviews of local businesses; nearly 80% trust them as much as recommendations from family members or friends. Because so many prospects rely on Google, your reviews need to reflect the type service you provide for your members. 

How you can improve it: Inform your members how reviews help your branch grow. Shortly after a certain step of the member journey, send an automated text message to your members inviting them to write a Google Review. 9 out of 10 members actually prefer to interact with your brand via text anyway.  


4. Lead Sources

Definition: The original point where a member hears of or first interacts with your brand. 

How to Calculate it: Send a post-purchase survey via text, email, or printed card (on location) asking members how they found your financial brand. 

Example: If you use a Customer Relationship Management (CRM) platform or a customer database, you can track customers as they come in through referrals, email promotions, Google Business Profile, social media leads, etc. Review your data to see what your top lead source is. 

In the year 2019, a credit union generated 10,000 leads. 4,000 were from Google Business Profile clicks, 4,000 were through social media ads, 1,000 were from email banner ads, and 1,000 were from direct mail. The member survey will help you know which leads were most effective in converting members. 

Why it matters: Generating leads requires strategic effort and planning. Knowing the channels that generate and convert the most leads will help you gauge your spend on marketing programs and ease up on efforts that aren’t bringing in members.

How you can improve it: Make it convenient for members and prospects to find and communicate with you. Be on the channels members use, including texting, social media platforms, email, phone, and web chat. Using a Customer Relationship Management Platform can help you respond to leads and inquiries from one central inbox.


5. Marketing Originated Member Percentage

Definition: The percentage of new members who first interacted with and converted to your financial brand because of a marketing tactic such as a digital ad or direct mail. 

How to calculate it: From your CRM data or a member survey, take the total number of members who originated from marketing leads and divide it by the number of new members in the same time frame.

Example: In Q2, a bank acquired 50 new members. 10 first heard of the bank through a radio ad, 10 saw an ad on Instagram, and 5 converted because of an online search. 

25 / 50 = 50% marketing originated members in Q2

Why it matters: Ideally, your marketing efforts should help members move through the entire conversion funnel. If this percentage is low, it could indicate points of friction that prevent members from converting. Customers form an opinion of your brand in as little as 0.05 seconds. First impressions and interactions, even if they’re just an ad, are more than likely to determine prospects’ desire to interact with your brand down the road.

How you can improve it: Ease points of friction that prevent members from converting. Optimize your landing page with clear, compelling, and relevant information members need. 91% of customers would prefer using an online knowledge base tailored to their needs rather than calling customer service. Use web chat to answer common questions in real time and connect prospects with a local representative to provide personalized help. 


6. Marketing Influenced Member

Definition: The percentage of members that interacted with marketing at any point in their journey to conversion.

How to calculate it: From your CRM data or a member survey, take the total number of members who interacted with marketing efforts and divide it by the number of new members in the same time frame.

Example: A financial brand acquired 1,000 new members in 2019. 800 members were influenced by marketing, including billboards, banner ads, and commercials.

800 /1,000 = 80% marketing influenced members in 2019 

Why it matters: If members are not influenced by marketing, you might be targeting the wrong audience or spending money in the wrong places. Your financial brand could also be in a different season of business, where most of your revenue is from returning and repeat members. Either way, this metric will help you evaluate the influence of your efforts in raising awareness, nurturing leads, and converting members. 

How you can improve it: When paying for digital ads, use the demographic features to target people living by your financial brand and with similar characteristics as your current member base. Try mixing up the type of ads you run including banner, retargeting, video, and social media ads to reach more people. 


7. Member Retention Rate

Definition: The number of members who stay with your financial brand over an extended period of time, or even utilize additional services you provide (i.e., open a checking account AND have a home mortgage loan).

How to calculate it: Track the number of members at the beginning and end of a time period, and the number of new members acquired during the same time frame. The formula should look like this:

Retention Rate = ((CE-CN) / CS)) 

CE = number of members at the end of a certain time period

CN = number of new members acquired during the same time period

CS = number of members at the start of the time period

Example: In January 2019, a financial branch had 1,000 members. In January 2020, the branch had 1,400 members. 500 members were acquired in the year 2019. 

((1,400 – 500) / 1,000)) = 90% retention rate in 2019.

Why it matters: Loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering. While acquiring new members is important, retaining the members you already have is less expensive, and will help you focus on optimizing the member journey.

How you can improve it: Take care of your members. The top reason customers switch brands is because they feel unappreciated. Bad experiences in person and digitally also decrease member satisfaction. Find out what makes your members happy and what detracts from their satisfaction with a member survey. Periodically send texts asking for feedback and you’re sure to find out what’s working and what’s not. 


8. Net Promoter Score

Definition: A metric (ranging from -100 to 100) used to predict business growth based on customer experience. The industry average for finance/major banks NPS is 0. 

How to calculate it: In a quick post-appointment text, ask members on a scale of 1 – 10 how likely they are to recommend your financial branch to a friend or colleague. 

From there, group members into three categories:

  1. Promoters: score 9 – 10 and are likely to be loyal members that actively recruit others to your financial branch.
  2. Passives: score 7 – 8 and can be persuaded one way or another toward you or a competitor. 
  3. Detractors: score 0 – 6. These members had poor experiences with your brand, and very likely to dissuade others from using your services. 

Next, calculate the percentage of Promoters and Detractors from your total responses. Subtract the percentage of Promoters from the percentage of the Detractors, and that will give you your Net Promoter Score (NPS). 

Example: 500 members participated in the most recent survey from a financial brand. 100 members rated 9 – 10, 300 members rated 7 – 8, and 100 members rated 0 – 6. 

Promoter percentage = 100 / 500 or 20%

Detractor percentage = 100 / 500 or 20%

20% – 20% = 0 NPS

Why it matters: Reputation equals revenue. If your members are happy, you can leverage their reviews and recommendations to acquire more members. If your members are not satisfied, you can use their feedback to pinpoint what steps of the member journey you can optimize and improve. 

How you can improve it: Focus on the member journey. Use texting and mobile banking to create seamless in-person and digital experiences that keep customers informed and up to speed with their financial information. 

You may be surprised how quickly your metrics can improve by connecting with your members on the channels they prefer. Consider using texting to generate reviews, collect surveys, and gather feedback from members. See how texting could optimize the member journey and even the marketing budget for your financial brand with a Podium demonstration.

Jeff Moss
Jeff Moss AVP of Financial Services Enterprise Sales

Jeff Moss is a credit union and bank professional at Podium, the leading messaging platform that connects financial institutions with their members and prospects.

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